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Overtime pay
[ch 4: page 118]Overtime pay is due where there is a contractual agreement to pay overtime. The agreement can be express or implied (including through custom and practice). Without agreement, there is no obligation to pay (see Chapter 3). For example:
A group of room attendants worked cleaning hotel rooms. Their work volume stopped them taking their full contractual rest break and instead they worked significant unpaid overtime. A collective agreement said that overtime was “voluntary”, but that “employees may be required to work overtime at short notice and cooperation in this matter is necessary”.
In this case, there was no evidence that the employees were asked to work overtime, and there was no detailed evidence of when, how often and for how long they worked the extra hours to complete their tasks. The EAT dismissed the claim, saying that the fact that the employees had no practical choice but to work extra hours in order to keep their jobs did not make the overtime compulsory, or “required” by their employer. There was no contractual obligation to work the overtime and so no right to be paid for it.
Blair v Hotel Solutions London Limited [2012] UKEAT/0412/11/DM
Where a union is recognised, overtime rates are likely to have been negotiated through collective bargaining and to be incorporated into the individual contract of employment (see page 91 of Chapter 3).
In 2014, there were important changes to the law on the treatment of overtime when calculating holiday pay. For more information see page 130.
Some workplaces have policies allowing their workers to “bank” time, or to take hours off work, making up the time later, often known as “flexitime”. The rules for this type of arrangement will be a matter for agreement between employer and employee, subject to basic minimum statutory rights, in particular as to pay and hours. Where unions are recognised, a collective agreement is likely to have been reached.
Employees should be careful not to build up large amounts of unused “flexitime”. In Vision Events (UK) Limited v Paterson [2013] UKEATS/0015/13/BI, the EAT ruled that there was no implied right to be paid for accrued unused “flexi-hours” at the end of the employment.